NCUA Letter to Credit Unions on the CUSO Rule; NAFCU Webcast
Written by Bernadette Clair, Senior Regulatory Compliance Counsel
Recently, JiJi blogged about the NCUAÃ¢ÂÂs adoption of a credit union service organization (CUSO) final rule. NCUA has issued Letter to Credit Unions 13-CU-13, outlining the primary changes to the CUSO-related rules, and providing an overview of what credit unions need to do as a result of the changes. These regulatory changes will become effective June 30, 2014. CUSOs will begin submitting reports to NCUA under new section 712.3(d)(4) when NCUAÃ¢ÂÂs reporting system becomes fully operational by December 31, 2015.
One aspect of the rule that I'd like to highlight today is that it clarifies how the new CUSO regulations apply to CUSO subsidiaries. From the letter:
The new CUSO regulations apply to all levels, or tiers, of a CUSOÃ¢ÂÂs structure. Any subsidiary in which a CUSO has an ownership interest of any amount is treated as a CUSO, and is subject to the regulations if it is engaged primarily in providing products or services to credit unions or credit union members.4
There is an inherent risk that a subsidiary CUSO could adversely affect the investing credit union and, ultimately, the NCUSIF. This provision was explicitly included in the regulation to ensure that credit unions and CUSOs are aware that the requirements of the NCUA regulations, and applicable state rules, apply to all subsidiary entities in which a CUSO invests. This includes entities with the appearance of being formed to evade the CUSO-related rules.Ã¢ÂÂ (Footnote omitted)
For complete details, Letter 13-CU-13 is available in its entirety here.Â Â Also note, NAFCUÃ¢ÂÂs Regulatory Affairs team will issue a Final Regulation summarizing the key aspects of this rule. Once it is available, it will be located here.
NAFCU Webcast Ã¢ÂÂ NCUA Update: Looking Ahead to 2014. On Tuesday, December 10th, from 2:00 Ã¢ÂÂ 3:30 p.m. ET, NAFCUÃ¢ÂÂs Regulatory Affairs team will be discussing NCUAÃ¢ÂÂs recent and expected actions for 2014, with a special focus on the newly-issued CUSO rule. Registration is still open - Sign Up Today! Remember, NAFCU's webcasts are available to anyone and everyone. On-demand webcasts are archived and available for up to 12 months after the live broadcast.
Have a great weekend!